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dkhullar7
New Member

I left my prior employer and they revoked all the money in my wage works account which I contributed to pre-tax. Can I claim this?

 
4 Replies
Bsch4477
Level 15

I left my prior employer and they revoked all the money in my wage works account which I contributed to pre-tax. Can I claim this?

If you leave your employer, you forfeit any pre-tax funds left in your account. There is nothing for you to claim. 

dkhullar7
New Member

I left my prior employer and they revoked all the money in my wage works account which I contributed to pre-tax. Can I claim this?

Thanks. Is there anything I can state about this on my tax?

xmasbaby0
Level 15

I left my prior employer and they revoked all the money in my wage works account which I contributed to pre-tax. Can I claim this?

No.   You do not enter anything about income you did not receive, and there is nothing you can deduct.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Opus 17
Level 15

I left my prior employer and they revoked all the money in my wage works account which I contributed to pre-tax. Can I claim this?


@dkhullar7 wrote:

Thanks. Is there anything I can state about this on my tax?


Wageworks appears to manage health and dependent care flexible spending accounts.

 

The IRS does not require that your balance be forfeit if you leave the employer, and you may be able to request reimbursement of medical expenses or day care expenses that you incur through the end of the year.  However, this seems to be something set up in the contract between the employer and the benefit management company, and if the employer allows the benefit manager to forfeit the account and keep the balance, there is probably little you can do about it.   You could try complaining to your state labor regulator, they might have rules covering this situation.   (For what it's worth, it's illegal for Wageworks to kick back the money to the employer.  They can keep forfeit amounts to cover their expenses and make a profit, but the money that was taken from your paycheck pre-tax can't go back to the employer.)

 

If this was a health care FSA, there is nothing you do on your tax return.  The wages were already not taxed, and you can't deduct money that you never received in the first place.  It's simply as if you were paid less, and you will be taxed on what you actually received.

 

If this was a dependent care FSA, you will have to report the FSA on your tax return.  Turbotax will ask for the amount spent on qualifying care, and the amount forfeit in the account.  Don't skip past this question, because it could cause the forfeit amount to be taxed in error.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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